This one is about Canada…. but Brazil and Australia investors must pay attention (since they might be suffering from the same “Dutch Disease”). From Business Insider:

“The common theme of these dangers is overvaluation: pricey real estate, inflated commodities and a currency too strong for the nation’s manufacturing exporters. The most obvious issue facing the Canadian economy is its housing bubble.

The risks to the Canadian economy are not confined to real estate. Many of the investors bullish on the countryand itscurrency justify their optimism on the grounds that commodity prices will continue to increase due to growth in developing economies. This is wishful thinking.

The real impetus behind the raw material spikes of recent years is not developing world demand, but rather a previously unimaginable degree of speculation in commodity markets. This was plain to see when oil plummeted from $147 a barrel in July 2008 to just over $30 in early 2009 as speculators unloaded their futures positions. Like housing, the commodity bubble has received attention.

Canada would seem to suffer from a serious case of “Dutch Disease”, an economic affliction whereby an appreciating currency prices a commodity country out of other export markets. The gains of Bay Street and the oil sands thus parallel the decline of export-oriented manufacturers across the country.”